Yes, we can explain it. We just haven’t proved it.
Take the scare quotes away and your overlay of assuming motives, and your description is accurate. The data is bad. Surface temperatures are more reliable than modern tree ring data, otherwise weather stations at airports would be composed of a stand of trees that are sampled every day.
The trick needs very little justification. It is a good trick.
If the purpose of the graph was to prove the accuracy of various proxies, then I would agree. Then it would be dishonest to suppress bad data. But that was not the subject of the graph.
That depends on whether those uncertainties are important to the subject being discussed.
It is not hidden when the subject being discussed is the reliability of proxies.
Full disclosure only applies to relevant information. For the graph in question, it was not relevant.
Did the graph say it was composed exclusively of tree ring data? If so, I agree. That was misleading. The graph should only say “temperature anomaly”. Then it would not be a fraud.
Actually, we merge and splice and blend temperature data all the time. The many many surface temperature stations each produce a single data set. Some of them go back in time further than others. Some of them have interruptions. Some of them were moved. But they are spliced and blended with the “trick” of averaging.